Analog Devices (ADI) Gains As Market Dips: What You Should Know

Analog Devices (ADI) closed the most recent trading day at $151.89, moving +0.69% from the previous trading session. This change outpaced the S&P 500’s 0.2% loss on the day. At the same time, the Dow lost 0.14%, and the tech-heavy Nasdaq lost 0.12%.

Coming into today, shares of the semiconductor maker had gained 1.77% in the past month. In that same time, the Computer and Technology sector lost 4.64%, while the S&P 500 lost 3.29%.

Wall Street will be looking for positivity from Analog Devices as it approaches its next earnings report date. The company is expected to report EPS of $2.58, up 49.13% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $3.16 billion, up 35.18% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $9.42 per share and revenue of $11.93 billion, which would represent changes of +45.82% and +63%, respectively, from the prior year.

Any recent changes to analyst estimates for Analog Devices should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over The Zacks Consensus EPS estimate moved 0.02% higher in the past month. Analog Devices is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, Analog Devices is currently trading at a Forward P/E ratio of 16.01. This represents a premium compared to its industry’s average Forward P/E of 14.73.

Meanwhile, ADI’s PEG ratio is currently 1.31. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. The Semiconductor – Analog and Mixed was holding an average PEG ratio of 0.8 at yesterday’s closing price.

The Semiconductor – Analog and Mixed industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 179, which puts it in the bottom 29% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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